June 30, 2008

WSJ: Obama, Democrats Lying About "Nonproducing" Oil Leases
— Ace

Caught between public anger over $4.00+ per gallon gas and their anti-oil base which cannot countenance additional drilling of any kind, Democrats have trotted out an extremely stupid talking point -- make oil companies drill where they currently hold leases before allowing any additional exploration. If they can sell this stupidity, they can claim they are in fact for additional oil production -- they're the ones trying to pressure the oil companies to stop "stockpiling" oil-rich lands -- while holding the line on additional wells, thus appeasing their base.

No Republican would be permitted such a convenient absurdity; the MSM would demolish it. But the rules are always different for Democrats, and the media is determined to help sell this lie.

Except for a few conservative-titling outfits, such as the WSJ.

Oil companies take leases not because they know there's oil on the land (or under the sea), but because they think there might be oil and need the lease in order to explore that possibility and to secure the legal right to pump it if they do find it. It's simply ridiculous to assume, as the Democrats' talking points do, that each and every lease actually contains a huge amount of recoverable oil, and the oil companies are simply refusing to drill there. Instead, the claim goes, the oil companies are clamoring for the right to grab up additional leases... which then, of course, they will also leave untouched.

Why are oil companies securing leases for oil they know is there but have no intention of drilling? If their goal is to not drill, why bother with the expense of a lease at all? They're all in on it together, in this conspiracy theory, so they can all just agree to not drill at all. They hardly need to pay the government money for the right not to drill.

This is all so ridiculous that the entirety of the MSM should have called this dishonest spin for what it is. But they didn't, of course, and so the WSJ is left to explain the obvious:

To deflect the GOP effort to relax the offshore-drilling ban – and thus boost supply while demand will remain strong – Democrats also say that most of the current leases are "nonproducing." The idea comes from a "special report" prepared by the Democratic staff of the House Resources Committee, chaired by Mr. Rahall. "If we extrapolate from today's production rates on federal lands and waters," the authors write, the oil companies could "nearly double total U.S. oil production" (their emphasis).

In other words, these whiz kids assume that every acre of every lease holds the same amount of oil and gas.

In other words, they're assuming that that the currently-nonproducing leases can produce the same amount of oil as the producing ones. And yet the productive wells were not chosen at random, were they? They were explored because they were the most likely to have oil, and then they were drilled because the exploration proved they had oil.

This is like assuming that because your wife agreed to marry you when you asked her to, you can randomly walk down the street proposing to strangers and enjoy the same 100% success rate.

Yet the existence of a lease does not guarantee that the geology holds recoverable resources. Brian Kennedy of the Institute for Energy Research quips that, using the same extrapolation, the 9.4 billion acres of the currently nonproducing moon should yield 654 million barrels of oil per day.

Nonetheless, the House still went through with a gesture called the "use it or lose it" bill, which passed on Thursday 223-195. It would be pointless even if it had a chance of becoming law. Oil companies acquire leases in the expectation that some of them contain sufficient oil and gas to cover the total costs. Yet it takes years to move through federal permitting, exploration and development. The U.S. Minerals Management Service notes that only one of three wells results in a discovery of oil that can be recovered economically. In deeper water, it's one of five. All this involves huge risks, capital investment – and time.

It also involves guessing at where one's resources are best used. If ExxonMobile has, say, thirty leases, and the money and equipment and manpower to only explore on, say, five areas at a time, they're obviously going to go after the most likely sites first, and the least likely areas will remain "nonproducing" in the interim.

But even the most likely sites are in fact highly unlikely to produce recoverable oil. It's a numbers game. Oil can be found -- but they need to be able to look in a lot of places.

...

Yet companies are not allowed to explore where the biggest prospects for oil and gas may exist – especially on the Outer Continental Shelf. Seven of the top 20 U.S. oil fields are now located in analogous deepwater areas (greater than 1,000 feet) in the Gulf of Mexico. In 2006, Chevron discovered what is likely to be the largest American oil find since Prudhoe, drilled in 7,000 feet of water and more than 20,000 feet under the sea floor. The Wilcox formation may have an upper end of 15 billion barrels of recoverable oil and should begin producing by 2014 – perhaps ushering in a new ultradeepwater frontier.

But by all means let's try to force companies to drill where they have little hope of finding oil.

Via Hot Air, which also makes this point:

Demanding drilling first on all extant leases is an absurd position to take when they don’t have any indication of accessible oil from the preliminary studies. It amounts to drilling dry holes at a cost of tens of millions of dollars each just to demonstrate the futility. Who do you think will pay that cost? Hint: it won’t be Barack Obama or Congress, but the people who drive up to the pumps every day.

Posted by: Ace at 09:17 AM | Comments (42)
Post contains 1012 words, total size 6 kb.

1 Err an idiot knows what leasing land means.  I'm not surprised that the Democrats don't.  Then again they probably know but regurgitate that shit to gullible and far-leftist idiots.

Posted by: Kaitian at June 30, 2008 09:23 AM (a5qbk)

2 Oh they know but it's not convenient for them to admit it and since nobody is going to really call them on it...

Posted by: ECM at June 30, 2008 09:34 AM (q3V+C)

3

But the rules are always different for Democrats, and the media is determined to help sell this lie.Except for a few conservative-titling outfits, such as the WSJ.

And even the WSJ addresses it only in its editorial. This should be an easy topic for any national or business political reporter of any outlet to pick apart.

I love the Wall Street Journal, but outside of the opinon pages, its pretty mainstream. (Recall that its Deputy Washington Editor used be Al "From the Left" Hunt.)

Editorials are nice, but they don't force politicians to tell the truth. The drumbeat of front page news stories and -- yes, ultimately -- network news reports are what shame politicians into dropping the b.s.

Posted by: CJ at June 30, 2008 09:58 AM (9KqcB)

4

I know of one occasion where this did happen.  My ex-husband worked in the oilfield in Pampa, Texas for Texaco for about ten years.  In the mid-90’s the oilfield was sold to another company – one of the big ones, Shell or Phillips, I can’t remember which.   As soon as the sale was final they laid off every employee and capped the wells. This is not a rumor, I was there.  The employees said the company would wait until the price of oil rose.  Who knows, maybe the field was becoming less productive, but then why would they have bought it

Posted by: Kathy at June 30, 2008 10:10 AM (UKqw4)

5

This is like assuming that because your wife agreed to marry you when you asked her to, you can randomly walk down the street proposing to strangers and enjoy the same 100% success rate.

You need to enroll in my seminar

Posted by: James Hussein Sears at June 30, 2008 10:12 AM (evdj2)

6

I'm invested in a company that's had to wait 8 months to finish drilling a well they left half complete because BLM forced them to suspend operations because there's an eagle nest within 2 miles of the drill site.

It ain't like these companies are just sitting on leases, it takes months and years to get the damn permits to drill once you get the lease.

Posted by: Molon Labe at June 30, 2008 10:18 AM (kYpqT)

7 Why Drill? Soon our cars will run on hope and change.

Posted by: demoncrat at June 30, 2008 10:32 AM (8nB5X)

8

Kathy, I know oilmen in Texas who capped their wells in the 90's when oil was $10 a barrel because they were losing money at that rate.

 

I like the idea of a $1 a gallon tax on states that don't allow drilling and $2 on states that don't allow drilling off their shore.

Posted by: PR at June 30, 2008 10:41 AM (k7SeR)

9 I question their patriotism. Take that Bambi!

Posted by: ntac at June 30, 2008 10:55 AM (jYyFD)

10

As someone that does exploration, I'll give away a trade secret: We drill...get this cause it's freaking genius...where the most oil is.

It's a time tested theory. It was originally discovered by a caveman who killed the biggest bison and realized that there was more meat there. From that point it disversified to picking the largest apples, later cutting down the largest trees for wood and finally getting the prettiest coeds drunk first on the cheapest vodka.

We'd call it the "val-u-rite theory" but some engineers still don't get laid and we geologist taunt them enough. Instead, we just call it "keeping your job in oil and gas."

For anyone that doesn't get that, let me explain it this way. Even though your goal is 18 small holes, you do use the whole golf course. It's not a waste of space. So congress needs to stick to things they understand like screwing congressional pages, pork and writing rules for the supreme court to overturn. Leave the exploration to the people that can actually tell the difference between their ass and a hole in the ground.

Posted by: Rob B at June 30, 2008 12:36 PM (q32Ly)

11 Mr Ace Sir,
I don't think it's very patriotic to say we are lying.
Didn't you hear the speech?
Where the hell is that anti-spam button on this blog anyway?


Posted by: Howard Dean at June 30, 2008 01:34 PM (Q1lie)

Posted by: Rocks at June 30, 2008 01:36 PM (Q1lie)

13

As dumb as this claim is, and it is stupid on it's face, the one that continues to bug the shit out of me is when the Dems keep whinning that any additional drilling offshore or in ANWR wouldn't yield any oil for a number of years.  Instead, they want to invest in unproven technologies such as electric cars and solar and wind which will cost significantly more, require a massive overhaul of supporting infrastructure and...wait for it...won't yield any results for even more years if ever.  Yet, nobody points out this obvious yet inconvenient truth.

This whole thing is a blatant excuse to rework our economy to favor more enlightened and ecology happy energy sources to support the myth of man made global warm..er climate change.

Posted by: JackStraw at June 30, 2008 01:38 PM (VBon8)

14 "It amounts to drilling dry holes at a cost of tens of millions of dollars each just to demonstrate the futility."

Not to mention countless more deep stab wounds in Mother Gaia, for no purpose whatsoever.

And they're -demanding- it.

They really are beyond parody.

Qwinn

Posted by: Qwinn Hussein Qwinn at June 30, 2008 01:41 PM (MN787)

15 Anyone know what happens if Bush directly lifts the executive order on offshore drilling?  Kudlow claims he's considering it.  Does congress still have to act or is that sufficient for some new exploration to start?

Posted by: leon Hussein caruthers at June 30, 2008 01:46 PM (7iTO9)

16 Posted by: leon Hussein caruthers at June 30, 2008 01:46 PM (7iTO9)

Even if Bush lifted the executive order (which he should, WTF is he waiting for?), Congress would still have to lift the drilling permit moratorium imposed in 1981.  So there are layers of stupidity going on here it would appear.

BTW, a Google search for "1981 drilling ban" will return a great many articles explaining the interplay between the legislative and executive branch actions that need to occur in order for the government to start issuing new drilling permits.

Posted by: Blacksheep at June 30, 2008 01:54 PM (EQYOq)

17

This is like assuming that because your wife agreed to marry you when you asked her to, you can randomly walk down the street proposing to strangers and enjoy the same 100% success rate.

Well, obviously, I would hit a 100% success rate.  But a total loser like you would be laughed into a TFL sanctuary.

Posted by: Dogstar at June 30, 2008 01:55 PM (FgxdU)

18

Earnest Hollings on Gary Hart getting busted boning that broad on his boat (deep southern drawl)

"I do declare ....... it seems the senator has changed his position ..... on offshore drillin'."

Posted by: fugazi at June 30, 2008 01:58 PM (+xwT3)

19

 

Posted by: Dumbass at June 30, 2008 01:59 PM (7DB+a)

20

Dogstar   Oh no you dih'ih .

Spongeworthy's gonna kick your can under the monkey bars after school.

Posted by: Creepy Hussein Dumbass at June 30, 2008 02:02 PM (7DB+a)

21 Congress would still have to lift the drilling permit moratorium imposed in 1981.

Then its a no-brainer.  You need that EO lifted NOW so that republican candidates can use the congressional permit ban aspect to beat the crap out of democrats in November.

Bush finally has a majority of the public behind him on something, he should take advantage of it.

Posted by: Purple Avenger at June 30, 2008 02:04 PM (dcqty)

22

...using the same extrapolation, the 9.4 billion acres of the currently nonproducing moon should yield 654 million barrels of oil per day.....

Can you strap a platform/rig onto a shuttle?

I don't know how the Oil Exec's can stay straight faced while facing the Congressional Monkey Overlord Panels that they have to appear before.  I keep hoping one of them will just lose it one day and call these ignorant chimps on their bullshit.

McCain should be blasting O'b on this.  Is he?

Posted by: Nurse Cheri at June 30, 2008 02:11 PM (cz6lG)

23 ...he should take advantage of it.

Yea, he should, but, umm....it's Bush.

Posted by: A. Weasel at June 30, 2008 02:12 PM (bqcfE)

24 Are Americans retards?  Democrats hope so.  But then again, so does John McCain.

Posted by: someone at June 30, 2008 02:12 PM (2z2WN)

25 Frankly, Bush should lift the ban and use the speech to rip the Dems on rights starting with Heller as an example.

A "the Dems want a say in everything you do" Speech.
Global warming? Just a back door attempt to tax us on breathing.(we already got the smokers)
Drilling ban? We can't even dig a hole in our own friggin yards anymore without a government say so.(You should recycle Fido instead of burying him)
Bring the troops home? Dems don't want to save money, just spend it somewhere else. (It's for the children.)
Hold up FISA over immunity? You can't even do what the government tells you is okay without worrying about being sued. (It's only big bad corporations anyway.)

Posted by: Rocks at June 30, 2008 02:18 PM (Q1lie)

26

Except for a few conservative-titling outfits

I guess there's a lot of those 'round here.

Posted by: MamaAJ at June 30, 2008 02:51 PM (X6Zdh)

27 Well said!

Posted by: LF Mayor at June 30, 2008 02:51 PM (AkPCZ)

28

The fact that Republicans have yet to figure out that this is a massive club to beat the dems with is astounding.

The congressional dems approval rating is in the shitter. Gas prices doubled (so far) on their watch! This should be like Ace taking Val-U-Rite from dead hobos.

Posted by: Iblis at June 30, 2008 02:52 PM (9221z)

29 I shouldn't be, but I am surprised that the Dems would even try such a lame-o tack. It's obvious that they're flailing if they're resorting to this.

I guess the general public doesn't know much about these things, but good lord, there are enough of people who do and shouldn't let the Dems get away with this.

My grandparents' ranch has been leased twice in the last 50 years. They've drilled a couple of holes in the past, and done some seismology, and never hit anything but water, but the lease money helped a lot with the ranch's bottom line.

We'll probably do a new lease soon because now the production companies suspect there's gas trapped in the cracks of an underlying geological belt, and all the ranches on top of this feature are being leased. It's still a crapshoot, though. They have no idea yet if there's actually producible gas under all the properties, but they're willing to pay to find out.

Posted by: stace at June 30, 2008 03:30 PM (JO0c/)

30 Apparently I'm on Dogstar's shit list for some reason.  I guess I'll have to go into my bedroom, hug my Hello Kitty doll, and cry.

Posted by: Manji88 at June 30, 2008 04:14 PM (g1MXQ)

31 Just read about the "you" trick on another thread.  Dogstar, you rascal.

Posted by: Manji88 at June 30, 2008 04:22 PM (g1MXQ)

32 Hee hee!

Posted by: Dogstar at June 30, 2008 05:08 PM (FgxdU)

33 People! People!
Don't worry. Be happy. Can't you see?
Our energy needs have already been provided for.

Crack teams of social engineers from The Democrat Corporative Entity LLC has been preemptively doing the heavy exploratory drilling, on a vast scale, for quite some time now...And it has all been a resounding success I might add. According to Newztweak, soul-reaping is up by 15 points for christ sake!

It took many years of hard drilling to do it but damn if our friends at The Democrat Corporative Entity LLC haven't managed to plumb the depths and tap into vast reservoirs of a mysteriously weightless miracle compound variously called "Soylent Blue", "BlueGold, or "D.C. tea".

Our long national energy crisis nightmare is over.

This wonder goo can provide for all the energy required to do virtually any sort of work. Say you need something that can propel you into power?  No worries. Just fire up your trusty 'ol eternal combustion engine filled with 99.9% pure distilled "Hope & Change" brand BlueGold and BAM! That shit is done! Want to ban McNugget dipping sauce, or decriminalize glaucoma medication? Spray some D.C. Tea on it and PRESTO CHANGE-O! Quicker than you can chant the chorus of Magic Bus..Problem solved!

You may ask - "Is there anything Hope & Change brand Soylent Blue can't facilitate?"

In a word...Nope.

"Yeah, but is it sustainable?"

I can testify that the sustainability of this miracle is second to none. Even though the richest fields have been shrinking steadily of late, new sources of crude Soylent Blue are constantly being excreted all across our once great Amerika. Hell, it's still bubbling out of the ground in the traditional frontier wastelands of Holly-wood, and the purest Hope & Change brand BlueGold very nearly saturates our Earth Mother, like to make your leg tingle, wherever journalists graze.

Better still - as far as future collective sustainability is concerned - enough core reproduction infrastructure remains in place on nationalized lands such that no additional urban Rednecked Chicken-Hawk flyover reserves or God-fearing Gun-clinger leech plantations need to be seized...Yet. We may not even need to activate the Legion of Zombie voters to mitigate mid-term reductions in demand for Hope & Change brand BlueGold.

All in all, we the equal are well-positioned to sustain progressive expansion as existing high skool / Liberal art refinery and reproduction resources are projected to meet demand all the way through November - despite being adulterated by copious amounts of ethanol and delta-9-tetrahydrocannabinol.

Best of all the entire cost of reproduction is shared equally. Now you tell me; What energy force could be fairer?

Beat that Halliburton!
Howz that ass taste bitches?

As you can plainly see, the fine folks at The Democrat Corporative Entity LLC watches out for their masses. We got your backs!

Posted by: monkeyfan at June 30, 2008 09:07 PM (cEE8N)

34

Well, I'll cop to being at least loser enough not to get myself saddled with that many potential wives.

For the record, my fine Republican Senator, that paragon of conservative values Mel Martinez, is also using this scam argument.  He is almost beyond parody.  This is the same jerk (and probable liar) that wrote me to explain that his opposition to offshore drilling was really based upon objections from the military, claiming that they had told him that more rigs out there would interfere with flight training!

Posted by: CJrun at July 01, 2008 04:26 PM (5cP8u)

35 I like what the geologist said about the holes and the golf course - there's no denying he has a special insight into the raw mechanics of oil exploration, but that said, he ought to take his own advice and leave the market analysis to the experts - including the industry watchdogs who report on the goings on in the oil biz. There's this little thing called "supply and demand". When a huge industry such as oil is privatized what you get is immense piracy at the corporate level. It's called "artificial scarcity" and yep, it was invented by a caveman and it's been around since the "witch doctor" collected all the shells on the beach and kept them to himself. Nothing new under the sun. Republicans ought to know such things, but they are turning a blind eye. And thus we all suffer, while the fat cats fleece us like spring lambs. You don't get permits for non-producing wells. The thousands of wells that are capped are permitted, people. End of argument.

Posted by: leslie at July 09, 2008 02:57 PM (hDY0v)

36 Whoops, I spoke too soon....of course, that is not the end of the argument, since my rep friends will no doubt point out that many a producing well has been capped due to liberal interference by way of ecological sanctions. Well, being the fair-minded libertarian I am, I'll look into it...there ought to be some stats on that. We'll see where it falls. In the meantime, where there's smoke there's fire. The cry of "liberals are to blame" is often a smoke screen to hide the nefarious goings on of those who make a mockery of both republican and democratic ideals. We need to wake up and pull together. Divided we fall.

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